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25040Venturebeat.comUber launches experiment to pay by cash in Indiahttp://venturebeat.com/2015/05/12/uber-launches-experiment-to-pay-by-cash-in-india/
http://venturebeat.com/2015/05/12/uber-launches-experiment-to-pay-by-cash-in-india/#respondTue, 12 May 2015 07:56:48 +0000http://venturebeat.com/?p=1727351Showing some flexibility in its payment model, Uber announced today that it would let customers in Hyderabad, India, pay by cash. “This is an experiment and a global first for Uber across our 300+ cities,” the company wrote in a blog post. “We have worked hard to create a cash payment option that is seamless […]
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Showing some flexibility in its payment model, Uber announced today that it would let customers in Hyderabad, India, pay by cash.

“This is an experiment and a global first for Uber across our 300+ cities,” the company wrote in a blog post. “We have worked hard to create a cash payment option that is seamless and truly Uber. Hyderabad was the only city specifically selected for this experiment because it provides us with the right environment to test a new payment option amongst a sizeable and sophisticated rider and driver community.”

In general, part of the appeal of the Uber experience has been the ease of payments that happen automatically via the app after a ride is complete.

Uber has faced some tangled legal problems in India, and the company faces tough competition from Ola, a cab-hailing service that operates in 110 cities in India. Currently, Uber has only launched in 11 cities in India, but a cash option could help it expand to other, smaller cities in a country where use of credit cards remains relatively low.

]]>http://venturebeat.com/2015/05/12/uber-launches-experiment-to-pay-by-cash-in-india/feed/01727351Uber launches experiment to pay by cash in IndiaCash policies for startupshttp://venturebeat.com/2015/04/08/cash-policies-for-startups/
Wed, 08 Apr 2015 07:30:00 +0000http://venturebeat.com/?post_type=vb_syndicated&p=1692241I heard a rumor on a call the other day that some startups are starting to keep balance sheet cash in higher yield instruments such as corporate debt. This is apparently becoming trendy again.
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I heard a rumor on a call the other day that some startups are starting to keep balance sheet cash in higher yield instruments such as corporate debt. This is apparently becoming trendy again as private companies do $25+ million rounds and end up with a bunch of cash on their balance sheets.

This scares the shit out of me. As a high-growth startup, I think you should be focusing on maximum protection for your cash, even if the yield is 0 percent.

In 2001, we had several companies lose over $1 million (including one that was public that lost $7.5 million) in corporate bonds, which were being pushed on startups by the various banks as “safe.” We also had at least one case of a mess in the 2008-2009 time frame with someone with one of those fancy auction-rate securities that froze cash for a while (they eventually got it).

And when I say “lose,” I mean the cash just vaporized. I remember seeing the email about the public company that had $7.5 million disappear from its balance sheet. No one on the board was even aware that cash was tied up in corporate bonds, let along risky yield-seeking ones. It was a powerful signal, at which point I actually spent time learning about the corporate debt market. It’s a good case of “It’s nice until it isn’t, and then it’s really not nice.” It’s probably even more severe today.

Don’t fall into this trap. It’s worth double-checking your cash/treasury policy at your next board meeting and making sure your board knows where your cash is. And, more importantly, if you are the chief executive, knowing where your cash is.

Be careful out there. The scary monsters are starting to hang out at the bar again. They look really cute, cuddly, and intriguing, until they don’t and chomp down on a random body part.

We all have that mooch friend that always neglects to pay us back or contribute their fair share.

Square introduced a new feature to Square Cash today that enables you to request money from anyone else via email. No longer must we operate in the realm of passive-aggressive text messages and awkward conversations to get friends to pay up.

Now all you have to do to request money is enter an email address, cc “request@square.com,” put the dollar amount in the subject, and hit send. The recipient then enters their debit information on a Square Cash page and can email you back the money. To cash out, you enter your own account information, and the funds will be deposited within 2 days.

You can also use the feature while replying to a group thread to request money from multiple people at once. Square Cash has tools for customers to check the status of a requested payment to see who has paid and who still owes money. This could make collecting money for group excursions decidedly less like herding cats.

“Square Cash requires a new level of faith that average users will have to accept,” he said. “With Square Cash, we may end up seeing how too much simplicity could end up being a bigger problem for usability.”

The same principle applies to requesting money as to sending it. It is easy to send someone a money request email, but that doesn’t mean they will feel comfortable paying that way.

You can also send and receive money through the Square Cash iOS and Android apps.

]]>http://venturebeat.com/2014/02/13/square-cash-unveils-request-feature-for-collecting-money-over-email/feed/0897965Square Cash unveils ‘request’ feature for collecting money over emailPayNearMe nabs $20M to bring cash-lovers into the digital economyhttp://venturebeat.com/2014/02/06/paynearme-nabs-20m-to-bring-cash-lovers-into-the-digital-economy/
http://venturebeat.com/2014/02/06/paynearme-nabs-20m-to-bring-cash-lovers-into-the-digital-economy/#respondThu, 06 Feb 2014 19:00:10 +0000http://venturebeat.com/?p=891751PayNearMe has developed a solution that lets you buy and make payments online using cash. The company announced today that it has raised $20 million in funding and that its payment volume tripled in 2013.
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The payments world is increasingly digital, but some people still prefer to pay with cash.

PayNearMe has developed a solution that enables people to buy products and make payments online using cash. The company announced today that it has raised $20 million in funding and that its payment volume tripled in 2013.

PayNearMe is a cash transaction network where people can pay bills, rent, repay loans, buy tickets, and make online purchases.

Businesses that accept PayNearMe will have it as an option on their payment page. Customers select this option and will either print a payslip or take their PayNearMe card to one of the 17,000 participating 7-Eleven, Family Dollar, and ACE Cash Express stores nearby. There they pay for the order in cash. The merchant is notified when the payment is received, and the customer gets a receipt confirming the transaction.

21 percent of households reported that they don’t need or want an account. Some people don’t like dealing with banks, find the account fees and minimum balance requirements too high, or have a negative banking history.

However, a significant and growing amount of commerce and business now happens over the Internet. Just because they prefer cash, doesn’t mean people want to be excluded from the convenience of paying for things online. And so financial alternatives are on the rise that bridge the gap between the cash and digital economies.

Payments giant PayPal is also making a push on this front. It released the PayPal My Cash Card just over a year ago, a “fully branded cash loading token.” People can buy the cards with cash at 30,000 retail locations such as CVS, load those funds into a PayPal account using a PIN number, and then transact online.

PayNearMe said it experienced the strongest growth in rent, utility agencies, and auto-lending. Property management companies such as AppFolio and RentPaidOnline have integrated PayNearMe, as have nine California utility agencies, and the hundreds of financial institutions that use loan servicing software from Shaw Systems, Megasys, and Nortridge Software Company.

The company also said it is gaining traction in new categories such as self-storage, direct selling, auto insurance, and banking, and is in negotiations to enter the healthcare, airlines, tolling, child support, and online entertainment sectors.

This financing will support geographic as well as category expansion. GSV Capital. August Capital, Khosla Ventures, Maveron, and True Ventures also participated in the round.

PayNearMe was formerly known as Kwedit. It has raised $65.6 million to date. This is the fifth round of funding for the Sunnyvale, Calif.-based company.

Apple has enough cash on hand to buy every man, woman and child in the U.S., UK, and Germany a $300 iPod Touch, and have a little left over for a case or two. Apple has enough cash to buy every person on the planet a $20 lunch. And Apple has enough cash to pay off the national debts of New Zealand, Kenya, Nigeria, Jamaica, Cuba, Egypt, Vietnam, and Singapore.

“No technology company has ever reported results like this,” Apple CEO Tim Cook said today, speaking about the company’s first quarter results which included record quarterly revenue of $54.5 billion and record quarterly profit of $13.1 billion.

In the three months of the quarter, Apple added $16 billion to its existing cash reserves of $121 billion. $94 billion of the total $137 billion is sitting offshore, CFO Peter Oppenheimer said. It would likely cost Apple billions in tax to repatriate it.

Apple is not the only technology company with bulging bank accounts. Google has well over $50 billion in cash reserves, Microsoft has over $60 billion in cash, and legendary investor Warren Buffet’s Berkshire Hathaway has similar numbers in its corporate piggy bank.

Apple, which up until recently had never paid dividends, will be issuing another dividend in February — on Valentine’s Day, the 14th. The company will be paying out $2.65 per share.

Apple’s results, which missed investors’ expectations in some of the key metrics such as iPhone sales, resulted in the stock dropping 10 percent in after-hours trading, signaling investors’ concerns with the company. But Apple’s cash hoard has to be a major positive for any investor, since it provides runway for the company to operate even it it has a bad quarter or two.

]]>http://venturebeat.com/2013/01/23/apples-cash-hoard-reaches-137-billion/feed/0609547Apple’s cash hoard reaches $137 billionCash: Rumors of its death are greatly exaggeratedhttp://venturebeat.com/2012/12/12/cash-rumors-of-its-death-are-greatly-exaggerated/
http://venturebeat.com/2012/12/12/cash-rumors-of-its-death-are-greatly-exaggerated/#respondWed, 12 Dec 2012 22:53:28 +0000http://venturebeat.com/?p=588816GUEST: If you think that the rise of companies like Square means the end of paper money, you're very, very wrong.
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This guest post was written by Danny Shader, CEO and founder of PayNearMe.

Lee Ault, CEO of the first check guarantee service, TeleCredit (which subsequently morphed into FiS Global), once described the moment his business exploded in the early 1970’s. In this era before ATMs, and when BankAmericard –-not yet renamed “Visa” -– was approaching critical mass, retailers avoided accepting personal checks because they were considered too risky. Ault broke his pick trying to sell TeleCredit as a loss reduction service to the few retailers that accepted them.

The breakthrough came when he brought the “no checks accepted” signs he gathered from auto dealers in LA to meetings with automakers in Detroit. He opened the meetings by dumping the pile of signs on the table, and stated: “This is how you greet your customers today –- the first thing they hear from you is ‘no!’”

One company immediately realized that they could dramatically increase their business by making it easier for customers to pay with checks, and the rest, as they say, is history: TeleCredit’s “Welcome Check!” signs soon appeared in store windows everywhere, consumers pulled out their checkbooks, and everyone benefited. All the while, credit card usage continued to grow.

So, here we are, fifty years later, and all eyes are on the great payment innovators of our day: Square, PayPal, Google, Intuit, WePay, Stripe, and many others who are revolutionizing or replacing “plastic.” But what about good ol’ cash? Is it going away, as a Fortune Magazine cover story recently suggested? With apologies to Mark Twain, reports of its death have been greatly exaggerated.

Although we don’t often hear consumers trumpet how easy, cool or innovative it is to pull out a dollar bill at the register, there are still perhaps as many as 100 million U.S. consumers who must or prefer to pay with cash. Yet, most online businesses in the U.S. treat them like check-writers in the age of Leisure Suits, before Lee Ault went to Detroit.

Outside of the US, a number of processes exist to serve cash consumers, including the Boleto system in Brazil and the

Konbini systems in Japan. Within the U.S., Western Union’s WUPay enables cash payments through their walk-up bill pay agents; Walmart and Toys R Us have launched systems that facilitate cash payments through their own stores; and my own company, PayNearMe, enables cash payments for any merchant at 7-Eleven and ACE Cash Express stores, with other retailers coming soon.

Others assume that cash consumers are universally less affluent. This turns out to be false as well. “Cash consumer” and “underbanked” are not synonyms. While it is true that more than 25% of U.S. households are considered un- or under-banked — a population that has increased by 821,000 since 2009 — there are other giant audiences who simply prefer cash.

The most obvious are the roughly 21.5 million American teens, most of whom prefer to use cash because it’s the only form of tender they have (other than their parents’ plastic, anyway). Other groups consist of those who have maxed out their credit cards, use cash to budget, or simply don’t want their purchase histories to appear on their statements. These millions of people don’t come to mind when many of us conjure up images of cash consumers.

By the way, if you assumed I was referring to adult products when I mentioned hiding purchases, you’d be mistaken. Many consumers don’t want to share their purchases of shoes, fishing rods, games, and purses with their partners. Again, want proof? Ask the television shopping networks, trunk sellers, and other direct selling businesses about the lengths to which their consumers go to avoid using plastic. And, for further evidence that we’re not just talking about consumers in the lowest tax brackets, check out this independent study of Walmart’s highly successful Pay With Cash initiative, which concluded that “usage appears to be highest among households with an income of $100k or greater.”

The spending power of these consumers –- teens, privacy seekers, those who don’t want to use their cards for one reason or another, and the un- and under-banked –- represents a huge opportunity for those willing to serve them without penalties.

What do I mean by penalties? Some merchants assume cash consumers can simply use gift cards. But, while gift cards are perfect for gifting, they can be highly wasteful when used as a substitute for cash. Why? Because the thriving gift card industry is predicated on “overspending”– the observation that gift recipients tend to spend more than the face value of the cards they receive. On the other hand, if your sole means of payment is a gift card, you’ll inevitably end up with an unused (and likely unusable) balance. Other merchants assume cash consumers will happily buy a pre-paid debit card. Since they don’t use these products themselves, they don’t realize how many are laden with fees. Still others encourage cash consumers to buy and mail money orders, although it would be hard to name a more frictional process.

Clearly, inconveniencing cash consumers or burdening them with fees suppresses their ability to spend. Since these cash consumers visit and subsequently abandon online businesses every day, the revenue lost by companies who choose to ignore them is likely staggering.

I am not arguing that cash should limit the incredible innovation occurring in payments today. But just as Telecredit enabled businesses to serve consumers who preferred personal checks in the same era that credit cards were taking off, we should recognize again today that payments are not a “one-size-fits-all” phenomenon, especially in the current economy. Everyone wants, needs, and deserves payment options that make sense for them, and the merchants that recognize this will reap the benefits. Even if that means cash hangs around for a few more centuries.

Photos: Shutterstock

]]>http://venturebeat.com/2012/12/12/cash-rumors-of-its-death-are-greatly-exaggerated/feed/0588816Cash: Rumors of its death are greatly exaggeratedZynga insiders cashed in $516M of stock — three months before the stock crateredhttp://venturebeat.com/2012/07/26/zynga-insiders-sold-500000000-of-stock-four-months-before-the-stock-cratered/
http://venturebeat.com/2012/07/26/zynga-insiders-sold-500000000-of-stock-four-months-before-the-stock-cratered/#commentsThu, 26 Jul 2012 23:27:47 +0000http://venturebeat.com/?p=498027Zynga insiders, including chief executive Marc Pincus, cashed out in April, selling 43 million shares for over $516 million -- just before the stock price cratered.
]]>Uh-oh. This one really doesn’t look good. In fact, the optics are about as bad as they can get.

As Henry Blodget points out, Zynga insiders, including chief executive Marc Pincus, cashed out in April, selling 43 million shares for over $516 million in a secondary stock offering. Pincus himself raked in about $200 million of that total, according to Blodget’s report. All of the proceeds went to the stock holders, not the company.

Yesterday, results for the past three months were announced: earnings of precisely one skinny American penny for each of Zynga’s 736 million shares, driving Zynga’s stock price sharply downward.

Besides Pincus, other Zynga employees who cashed out include Zynga’s chief operating officer John Schappert and chief financial officer David Wehner. Investors who took the opportunity to sell include LinkedIn’s Reid Hoffman, Google, and four venture capital firms including Fred Wilson’s Union Square Ventures. Each of them sold over 300,000 shares at an average price of $12 per share.

Above: Zynga CEO Marc Pincus

Image Credit: Dean Takahashi

That netted all of these insiders a nice chunk more than anyone who sold at today’s price: just over $3.

But the optics look bad. And they look double plus ungood if you happen to be a Zynga investor with stock that has shed 80 percent of its value in a single year, coming down from a high of over $16 per share.

Good thing that all of the sellers, including Marc Pincus, only sold “a fraction of their holdings,” according to Blodget, so all of them remain well-vested in the company’s future.

]]>http://venturebeat.com/2012/07/26/zynga-insiders-sold-500000000-of-stock-four-months-before-the-stock-cratered/feed/1498027Zynga insiders cashed in $516M of stock — three months before the stock crateredDropbox funding: Are founders personally cashing in on $300M round?http://venturebeat.com/2011/08/08/dropbox-founder-liquidity/
http://venturebeat.com/2011/08/08/dropbox-founder-liquidity/#respondMon, 08 Aug 2011 22:53:17 +0000http://venturebeat.com/?p=317523[Update: We’ve just heard from a close source close to the investor syndicate on the pending round, and he said it’s not true the founders are getting a majority of the round. He would not specify details.] Cloud storage service Dropbox could be using the “vast majority” of the funds raised in a new $200-$300 million round […]
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[Update: We’ve just heard from a close source close to the investor syndicate on the pending round, and he said it’s not true the founders are getting a majority of the round. He would not specify details.]

Cloud storage service Dropbox could be using the “vast majority” of the funds raised in a new $200-$300 million round to provide liquidity to the company’s founders, according to a source familiar with the funding.

That would mean the founders would be personally pocketing a huge pile of cash, well before any public offering provided liquidity to other investors or to employees.

This kind of deal, in which founders get cash in exchange for their stock, is increasingly common, especially in late-stage investment rounds. Investors justify the move as a way to keep them managing aggressively, by removing some of their personal risk.

However, it’s a trend that has grown conspicuously in recent years, after once being extremely rare. You could argue that giving founders cash early on removes the fire in the founder’s belly. Content with cash, and more eager to spend it on homes and on a more balanced life-style, they may not want to keep driving the company as aggressively.

The dollar amounts behind recent founder liquidity rounds are becoming uncommonly high. For example, in January 2011, Groupon raised $950 million; a round in which existing shareholders received $344 million in cash. The regulatory filing does not provide details on who gets how much. Then, in June 2011, Groupon filed to go public with a massive offering of $750 million. Groupon shareholders were given a chance to sell up to 15% of their holdings via this offering. That could have been a peace offering from management for shareholders upset by Groupon’s denial of Google’s earlier $6 billion buyout offer.

Dropbox doesn’t comment on rumors or speculation, according to its internal public relations team. We’ve reached out for comment from the company’s investors, and are waiting to hear back.

Dropbox was founded in 2007 by Drew Houston and Arash Ferdowsi (pictured) and has received $7.1 million total funding from Y Combinator, Accel Partners, Sequoia and others. (Update: That includes a seed round of $1.2 million in convertible debt from Sequoia and Amidzad Partners, which has also invested in VentureBeat.)

TechCrunch broke the news about the funding, and also reported that the company has collected term sheets from VCs that made bids in an investment auction. One of those offers could make Dropbox’s valuation $10 billion post-money. Yes, billion. Dropbox was previously valued at just $7 million. And yes, if the valuation crept that high, and interest was that competitive, it’s no doubt that investors offered sweet terms to the founders in order to get into the deal.

Founders can achieve liquidity through a sale or merger, IPO or by selling shares on the secondary market to an investor. This last scenario is typically done for working capital purposes (i.e. the company was bootstrapped and the founder has taken on personal debt) and there isn’t typically an economic benefit or cost to the company.

The problem with founder liquidity is it doesn’t help a company grow. It is traditionally used in mature, profitable companies when it is the only way for a new investor to gain an ownership stake. A move like this may be especially hard for employees and other management shareholders to swallow during bad economic periods. It isn’t something to be taken lightly.

Additional contributions from Matt Marshall.

]]>http://venturebeat.com/2011/08/08/dropbox-founder-liquidity/feed/0317523Dropbox funding: Are founders personally cashing in on $300M round?PayNearMe goes mobile, lands $16M to enable online payments with cashhttp://venturebeat.com/2010/11/16/paynearme-goes-mobile-lands-16m-to-buy-online-goods-with-cash/
http://venturebeat.com/2010/11/16/paynearme-goes-mobile-lands-16m-to-buy-online-goods-with-cash/#commentsTue, 16 Nov 2010 13:00:46 +0000http://venturebeat.com/?p=227073Cash payment service PayNearMe, formerly known as Kwedit, announced today that it has grabbed another $16 million in funding and is launching a new mobile payment option. Directed at consumers who don’t have access to credit cards, PayNearMe lets users pay cash for online goods and services. PayNearMe’s new mobile option lets you make online […]
]]>Cash payment service PayNearMe, formerly known as Kwedit, announced today that it has grabbed another $16 million in funding and is launching a new mobile payment option.

Directed at consumers who don’t have access to credit cards, PayNearMe lets users pay cash for online goods and services. PayNearMe’s new mobile option lets you make online purchases simply by providing your phone number to an e-retailer.

After submitting your phone number, you just need to grab a PayNearMe card from a 7-Eleven store, and reply to a text message sent by the service with the card’s unique identification number. Then you just hand the card to a 7-Eleven cashier and pay for the amount owed with cash.

The company says it will be using its funding to add new retailer payment locations as well as new services. PayNearMe also announced that Mark Britto, CEO of mobile payment company Boku, will join its board of directors.

The company’s Kwedit Promise service is also still running. It allows consumers to receive digital goods with a promise to pay for them later with cash at 7 Eleven stores, by mailing cash, or by asking friends or relatives to pay for them.

Just as it was when we initially covered Kwedit, paying cash for virtual services still seems like a compelling choice for many consumers. The company says that over 50 percent of adults in the U.S. would rather pay for purchases using cash, and over a quarter of households don’t have access to credit cards or bank accounts (which gives you access to debit cards).

PayNearMe is based in Mountain View, Calif. The funding round was led by Khosla Ventures, and saw participation from new investor August Capital and current investors True Ventures and Maveron. The company previously raised $6.3 million in funding.